Kenya's army is involved in a $400-million sugar smuggling racket in Somalia that also funds the Al-Qaeda militants it is supposed to be fighting, a report alleged Thursday.

Far from fighting the Shebab, Al-Qaeda's East Africa affiliate, the Kenya Defence Forces (KDF) are, "in garrison mode, sitting in bases while senior commanders are engaged in corrupt business practices," said the investigation by Nairobi's Journalists for Justice rights group.

The report is based on months of research conducted in Somalia and Kenya, including interviews with serving Kenyan officers, United Nations officials, Western intelligence sources, sugar traders, porters and drivers.

The report also accused Kenyan troops of "widespread" human rights abuses -- including rape, torture and abduction -- and conducting air strikes "targeting crowds of people and animals" rather than the militant training camps it claims to bomb.

Kenyan army spokesman, Colonel David Obonyo, denied the allegations, insisting Kenyan soldiers were fighting hard as part of the 22,000-strong African Union Mission in Somalia (AMISOM).

"We are not involved in sugar or charcoal business," said Obonyo. "How can you sit down with Shebab one minute, and the next you are killing each other?"

Kenya's army has denied repeated allegations of war profiteering since invading Somalia in 2011 after a string of kidnappings of tourists and aid workers blamed on the Shebab.

- Illicit business, terrorist blowback -

In the years since, Shebab attacks in Kenya have grown in number and scale -- including the killing of at least 67 people at Nairobi's Westgate Mall in 2013 and the massacre of 148 people at a university in Garissa in April -- with the militants saying the attacks are retaliation for the Kenyan military presence in Somalia and "war crimes" committed by Kenyan troops.

Persistent allegations of Kenyan military involvement in illegal business dealings in Somalia first emerged soon after the army occupied the southern port town of Kismayo in 2012, where it took control of a stockpile of millions of sacks of charcoal.

Successive reports by the UN Monitoring Group -- which investigates terrorist financing and infringements of an arms embargo -- have detailed the joint role of KDF, the Shebab and the local Jubaland administration in the illegal export of charcoal.

The most recent annual report, published last month, also referred to KDF involvement in the illegal sugar trade.

Journalists for Justice estimates the total value of illegal sugar smuggling to Kenya at between $200 million and $400 million.

Its investigators found that KDF taxes every sack of charcoal that leaves and every sack of sugar that arrives at Kismayo, earning an estimated $50 million (46 million euros) a year.

The Jubaland administration and the Shebab also tax charcoal and the sugar trucks driving from Kismayo to the Kenyan border at Dhobley-Liboi.

"The illicit conflict economy is benefitting both Al-Shebab and those ostensibly opposing them," the report said.

The group accuses an unnamed "high ranking military official" of running a sugar smuggling network that enjoys "the protection and tacit cooperation" or Kenya's political leaders.

"The corruption and human rights abuses undermine Kenya's goals in Somalia, provide funds to Al-Shebab, and ultimately result in the deaths of hundreds of innocent Kenyans," the report said.